Applying Principles: Short Essays Based on the Philosophy of Ayn Rand, Economics of Ludwig von Mises, and Psychology of Edith Packer

By Jerry Kirkpatrick

Applying Principles is a collection of short essays published between January 2007 and December 2016 as monthly blogposts at jerrykirkpatrick.blogspot.com. The author's aim was to write interdisciplinary, serious posts to inspire critical thinking. Topics, grouped as chapters, range from capitalism and politics to epistemology, academia, education, psychology, youth sports, and the arts.

The title derives from the author's thirty-six years as educator in the applied science of business marketing. Applied sciences, the author realized early in his career, require a deductive process of applying general, more fundamental principles to specific issues. The business disciplines rest on economics and psychology, and those two in turn, as all sciences, rest on philosophy.

The essays therefore are not journalistic, though many deal with recent issues; they apply fundamental ideas to concrete areas. Examples: “Choice Theory and Capitalism versus Dictatorship,” “The Ethics and Epistemology of Peer Review,” “Interest and the Core Curriculum,” “Ensuring that Disposition Trumps Situation,” and “Nutrition and the Argument from Uncertainty.”

Posts included in “youth sports” came about because the author's daughter played softball; many comments bring up issues in psychology. And “the arts”—only two posts—stem from the author's lifelong interest in music.

Applied science gathers all relevant concrete facts of the specific case it is working on, then uses, that is, applies, the universal concepts and principles of the fundamental sciences on which it rests, plus the narrower concepts and principles of its discipline.

Excerpt from “Describe, Don’t Evaluate,” pp. 201–02:

This principle—describe, don’t evaluate—has broad application and includes relationships not just of sellers to customers, but also of parents to children, teachers to students, and employers to employees, among others. The principle is recommended as a replacement for negative criticism: “The milk spilled!” (describe) as opposed to “I don’t believe you did it again! How could you!” (evaluate). Name-calling, sarcasm, threats, berating, and the like, undercut self-esteem and cause defensiveness by attacking the other person’s character or personality.

Factually describing the incident helps the other person (child or student or employee) avoid drawing negative conclusions about him- or herself. The recipient of the criticism is then allowed to regroup and correct the situation. “Constructive criticism,” child psychologist Haim Ginott in Between Parent and Child says, “confines itself to pointing out what has to be done, entirely omitting negative remarks about the personality of the child” (or, by extension, student or employee).

Ginott goes on to apply this principle to the extravagant praise that is often heaped on children, such as the ubiquitous “Good job” or “We’re so proud of you.” Says Ginott, “Direct praise of personality, like direct sunlight, is uncomfortable and blinding. It is embarrassing for a person to be told that he is wonderful, angelic, generous, and humble. He feels called upon to deny at least part of the praise. . . . [and he] may have some second thoughts about those who have praised him: ‘If they find me so great, they cannot be so smart.’ ”

The same applies to the puffery heaped on students and employees.

• Language: English
• Publisher: Jerry Kirkpatrick
• Release date: Oct 1, 2021
• ISBN: 9781005682057

Jerry Kirkpatrick

Jerry Kirkpatrick is professor emeritus of international business and marketing at California State Polytechnic University, Pomona. Inspired in high school to think about fundamental ideas, Kirkpatrick majored in philosophy as an undergraduate before pursuing his advanced degrees. He now writes a monthly blog at jerrykirkpatrick.blogspot.com, discussing, among other topics, his special interests in epistemology and psychology.

Book preview

Applying Principles

Also by Jerry Kirkpatrick

In Defense of Advertising:

Arguments from Reason, Ethical Egoism,

and Laissez-Faire Capitalism

Montessori, Dewey, and Capitalism:

Educational Theory for a

Free Market in Education

Independent Judgment and Introspection:

Fundamental Requirements of the

Free Society

Applying Principles

Short Essays

Based on the

Philosophy of Ayn Rand,

Economics of Ludwig von Mises,

and

Psychology of Edith Packer

Jerry Kirkpatrick

Kirkpatrick Books

Upland, California

Publisher’s Cataloging-in-Publication Data

Name: Kirkpatrick, Jerry, author.

Title: Applying principles : short essays based on the philosophy of Ayn Rand , economics of Ludwig von Mises , and psychology of Edith Packer / Jerry Kirkpatrick.

Description: Includes bibliographical references and index. | Upland, CA: Kirkpatrick Books, 2021.

Subjects: LCSH Capitalism—Essays. | Economics—Essays. | Psychology—Essays. | Rand, Ayn—Criticism and interpretation. | Von Mises, Ludwig, 1881-1973—Criticism and interpretation. | Packer, Edith—Criticism and interpretation. | BISAC POLITICAL

SCIENCE / Political Ideologies / Capitalism | EDUCATION / Essays |

PSYCHOLOGY / Applied Psychology |PHILOSOPHY / Epistemology

Classification: LCC HB501 .K57 2021 | DDC 330.12/2—dc23

Copyright © 2021 by Jerry Kirkpatrick

All rights reserved. No portion of this book may be reproduced, by any process or technique, without the express written consent of the publisher.

Library of Congress Catalog Card Number: 2021908577

Kirkpatrick Books (formerly TLJ Books), Upland, CA 91784

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Cover by 1106 Design, Phoenix

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Contents

Preface

Chapter 1: Capitalism and Politics

Does Subliminal Advertising Exist?

Healthy and Unhealthy Competition

Why Does Capitalism Need To Be Defended?

The Market Gives Privilege to No One

The Market Function of Piracy

It’s Just Being Turned into a Business

Postmodernism and the Next Failure of Socialism

The Two Liberalisms

Coerced Altruism, Involuntary Servitude, and Contempt for the Less Well Off

Why the World Is Not Going to Hell in a Basket

The Importance of Philosophy to a Successful Business Career

Ideas Kill

Choice Theory and Capitalism versus Dictatorship

Working in Business as Opposed to Being a Student

The Blender Principle

Altruistic Twaddle and the Harm It Causes

The Triumph of Ethics over Practicality: A Tale of Two Cities

Politics Is a Bore (Retitled: Who Are We Going to Coerce Today?)

The Comparative Society

The Sovietization of Federal Law

Return of the Blackshirts?

How the Government Kills Industries

The Whistleblowers: An Indictment of the Mixed Economy and Bureaucracy

The Elites and the Underground: No Law vs. Rule of Law vs. Excessive Law

The PhD Cop

The Not-So-Visible Gun: Government Is Not Our Friend

Ayn Rand, of Course, Was Right

The Galilean Personality vs. Wall-to-Wall Marxism and Human Sexual Identity

Further Comment on Galileo’s Middle Finger

Americanized Maoism, the Narrative of Political Correctness, and Racist Minimum Wage Legislation

The Communist Era and Capitalism vs. Democracy

On Involuntary Servitude: You’ll Do Something, Mr. Cook. . . . If You Don’t, We’ll Make You.

The Fascist Early Progressives

Who Are We Going to Coerce Today?—Also Known As: Politics Is a Bore 2016 Version

The Reductio of Bureaucracy: Totalitarian Dictatorship

Chapter 2: Academia

Drop Errors and the Trouble with Peer Review

Privilege, Peer Review, and Piracy: Q & A

The Ethics and Epistemology of Peer Review

Because the Stakes are So Small

The Ethics of Accreditation

Ignorance versus Dishonesty

The Flawed Environment of Academic Research

Challenging the New McCarthyism

Trigger Warnings

Crybullies, Non-Negotiable Demands, Micro-Totalitarianisms, Academic Fascism . . . and Cabaret

Chapter 3: Education

Go Fish!

On Judging the Quality of Today’s Students

Peddlers of Ideas

The Child As Small Adult

Interest and the Core Curriculum

The Primacy of Method

Education and the Rent Control Model of Monopoly

Education in One Lesson

You Can Get It in the Book

The Factory Model of Education, Technocracy, and the Free School Movement

Teaching versus Learning versus Doing

Rankism and the Well-Earned Disrespect of Some Teachers

Control and Choice in Education

Group Projects: The Bell Has Tolled

Educational Innovation from Outside the Establishment

Look It Up, Look It Up: The Open-Book Test

On Killing Creativity

Plagiarism—Beyond a Reasonable Doubt

Filling the Swiss Cheese Holes

Chapter 4: Psychology

Describe, Don’t Evaluate

Curiosity for Subtle Detail

Sound or Independent Judgment?

Rules vs. Principles

Ensuring That Disposition Trumps Situation

Faking Your Way Through Life

The Von Domarus Principle and the Nature of the Subconscious Mind

The Courage to be Patient

Questions about Independent Judgment

Standing Down from External Control

Theory of the Big Mouth

The Primacy of Psychology

On Hitting . . . Dogs and Children

Should Spanking Be a Felony?

Look at Your Premises. Look. Look. Look!

Children Don’t Have Disorders; They Live in a Disordered World

Statements of Independence

Introversion, Quiet Persistence, and the Tortoise

The Barbarity of Modern Psychiatry

Kindness versus Hard Science

The Science Isn’t There

Men of Hard Science and the Denial of Animal Emotions

The Root of Dictatorship

In Praise of Quitters and Failures

Parents: Be Your Children’s Friend—Give Them the Easy Life

Thoughts, Not Environmental Conditions, Cause Criminal Behavior

The Role of Honor in Moral Revolutions

A Neoconservative’s Defense of Pseudo-Honor

Fixed vs. Growth Mindsets

They’ll Be Fine—Two Takes on Indifference to Psychology

The Bureaucratic Personality: Similarities to the Criminal Mind?

On Hitting Dogs and Children . . . and Prisoners of War

Defending Hate Speech and Satire against the Criminal Mind

From the Stick Motivation Department: Chores

From the Stick Motivation Department, Part Two: Class Participation

Chapter 5: Epistemology

The Dangerous Admiration of BS

Dewey in Context

The Epistemology of Ethics, Salesmanship, and Basket Weaving

Nutrition and The Argument from Uncertainty

Virulent Absolutism in an Age of Relativism

Facts Don’t Matter, Or: The Art of BS

Polylogism, the Right to Lie, and Serial Embellishers

Why Don’t Facts Matter?

Genes vs. Environment: Anyone for Free Will?

Is Intelligence Inborn?

Statistical Projection vs. Scientific Generalization

Chapter 6: Youth Sports

Caterpillars into Butterflies

On Extrinsic Motivation, Bureaucracy, and the Stage-Mother Syndrome

Yes, There Is Crying in Softball

Tiger Mom or Stage Mom?

There Are More Important Things in Life Than Softball

Miniature Adults, the Marketing Concept, and a Montessori Approach to Organized Youth Sports

Life Lessons from Sports: What about the Sixty Years after College?

The Obsession with Scholarships

Not-So-Good Life Lessons from Sports

More, More, More Does Not Mean Better

And Now, the Concussion Issue

Overuse Injuries—What the Experts Are Saying

Year-Round Single Sport Specialization: Not Good for Kids or Skill Development, Experts Say

Chapter 7: The Arts

Life in Three-Quarter Time

Evita: Why We Love That Musical about a Dictator

Index

Preface

Applying Principles is a collection of short essays published between January 2007 and December 2016, my first ten years of blogging at jerrykirkpatrick.blogspot.com. In the blog’s masthead, I write the following:

This blog comments on business, education, philosophy, psychology, and economics, among other topics, based on my understanding of Ayn Rand’s philosophy, Ludwig von Mises’ economics, and Edith Packer’s psychology. Epistemology and psychology are my special interests. Note that I assume ethical egoism and laissez-faire capitalism are morally and economically unassailable. My interest is in applying, not defending, them.

Although I spent thirty-six years in college classrooms teaching undergraduate and graduate students business marketing, my bachelor’s degree was in philosophy. That subject influenced and underscored my entire career. As a result, I never let the day job of teaching students how to sell soap (as I would often describe my academic duties) become disconnected from its foundations in psychology, economics, or philosophy.

Indeed, I recognized early in graduate school that marketing, as well as the other business disciplines, are properly described as applied sciences that rest on those more fundamental fields. Art is sometimes used to describe applied science, but the usage is correct only if it is meant as a synonym. Often the word is meant to disparage applied fields because they are allegedly less precise or rigorous than real science, which means the physical or quantitative sciences. A student many years ago complimented me when she realized that advertising was as disciplined (her word) as finance, her major. There may not be universal equations in the applied human sciences, but the principles are universal in their appropriate context and the fields are disciplined.

Business as applied science is analogous to medicine and engineering. Medicine rests on biology for its more fundamental foundation and engineering on physics and chemistry. All fundamental and derivative special sciences, again in turn, rest on philosophy. All such fields are related and should be integrated, rather than isolated as they so often are in today’s academic world.

Thus, what I did when researching, writing, and teaching was to apply principles from the other, more fundamental fields, which explains my interest in epistemology and psychology, as well as the principles unique to marketing and advertising.

To illustrate further, the civil engineer whose goal is to build a bridge must know not just the fundamentals of physics and chemistry, but also the nature and composition of materials (used to build the bridge), and also the nature and behavior of rivers, which includes the history of the particular river over which the bridge will span and the nature and behavior of the river’s soil and water.

Applied science gathers all relevant concrete facts of the specific case it is working on, then uses, that is, applies, the universal concepts and principles of the fundamental sciences on which it rests, plus the narrower concepts and principles of its discipline.

Application is one of the two fundamental methods of cognition and is deductive. Generalization is the other and is inductive. We all use both every day in our lives. The two methods, as I say in my 2018 blog post, are not the monopoly of scientists, philosophers, or academics in general. Generalization gives us concepts and principles to guide our lives, while it also gives us theory and theoretical science. Application, which requires the previously acquired knowledge that generalization gives us, is what our medical doctors do, what Sherlock Holmes did, and what we do on a daily basis.

Application means we identify a this as an instance of a that. We present a cough and runny nose to our doctor and he or she quickly concludes, based on accumulated knowledge and patient history, that we have a cold. Similarly, Holmes saw that Watson was tanned and showed signs of having been wounded in a war; thus he concluded Watson recently came back from Afghanistan. And a child applies the previously learned concept of balance by shifting weight when learning to ride a bicycle. All three examples are processes of deduction, and illustrate how deduction is the predominant method of applied sciences, as well as everyday life.*

Deduction, therefore, is essentially what I have been doing when writing my blog posts. I am not in any intended way coming up with new concepts or principles, nor am I repeating the proofs of the great writers listed in my masthead, or others I may cite in a post as a reference. I take their ideas and apply them to specific issues.

The following essays are not journalistic as a newspaper column might be. I gave myself the assignment always to come up with something more fundamental than the news of the day, whether theoretical or historical, which last includes relevant citation of research.

I also gave myself the assignment initially to write essays of between 800 and 1200 words. In later years, the length increased and a couple of essays are long enough to have been split into two parts as might have occurred in the days of printed four-page newsletters. I saw no reason to split them in today’s electronic age.

My goal was to write one post a month, though in 2007 there are two months with two posts each. I settled quickly on publishing the one post at some point during the month, with no particular deadline confronting me. When I was still teaching in the earlier years, that posting date was sometimes rather late. Now I try to post within the first one or two weeks.

There are 125 posts in this collection. In the calendar year 2015 I added a note saying that I was not going write one post a month, or even standard-length posts, as I needed time to work on my book Independent Judgment and Introspection. Not a lot of visible progress, however, was made on the book, so by October I was back to one standard-length post per month. I realized that I enjoy the stimulation of writing something on a more or less regular schedule.

The posts are organized into seven chapters, listed chronologically within chapter. Because of the way I write—interdisciplinary to use the academic jargon—one may quibble over some classifications. Chapter 6 on Youth Sports began as individual posts on the main blog, but for about a year, 2013–14, I posted those first essays, along with some new ones, in a sports blog that is still online at youthsportsgoodforkids.blogspot.com. (Our daughter was playing softball, which gave us a front row seat in the culture of youth sports.) For some posts I found that a book recently read provided opportunity for comment, though I do not call these book reviews. And some posts are either excerpted from one of my books or were drafts of what finally appeared.

I do have favorites. It was difficult to choose one per chapter, but here they are, in chapter order:

The Reductio of Bureaucracy: Totalitarian Dictatorship

Because the Stakes Are So Small

Go Fish!

Look at Your Premises. Look. Look. Look!

Why Don’t Facts Matter?

Yes, There Is Crying in Softball

Life in Three-Quarter Time

All links in the present collection have been checked, though not as many degraded as I would have thought. New-found locations or good substitutes in almost all cases were found with some substitutes from a later year than the date of original posting. Light edits and comments not included in the original are bracketed. Date of publication of each post is at the end of its posting in parentheses. Editorial footnotes, indicated by one, two, or three asterisks, are also positioned at the end of their respective posts.

My idea for publishing this collection comes from two books of columns: All It Takes Is Guts by economist Walter Williams and Double Standards by radio show host Larry Elder. I did not read these books from beginning to end. I skimmed the table of contents and read whatever caught my attention. Readers of this work might want to do the same.

My primary acknowledgement is to my wife, philosopher Linda Reardan, my soulmate for forty years, philosophical consultant, and editor. I also owe a considerable gratitude to economist George Reisman, who was a student of Ludwig von Mises and could easily have been listed in the blog’s masthead. Through his writing and teaching, Professor Reisman taught me how to be a scholar; his work permeates my understanding of a free society.

* It is in this sense that history is also an applied science. We, as well as professional historians, look at past events, natural or human, and try to explain them, that is, identify their causes, by reference to our accumulated theoretical knowledge. Historians in the human sciences rely in particular on political philosophy, economics, and psychology. See Ludwig von Mises, Theory and History, mises.org.

---

Note to the electronic editions. Most links to books are to goodreads.com, a site that does not directly sell books. This is a requirement of ebook sellers who do not want links to competitors in their readers. Some links are to mises.org and a very few to worldcat.org.

Chapter 1: Capitalism and Politics

2007

Does Subliminal Advertising Exist?

Starting a new blog

— and especially since the paperback edition of my book defending advertising (In Defense of Advertising: Arguments from Reason, Ethical Egoism, and Laissez-Faire Capitalism) has just been published — I suppose I should begin with a post about advertising. So let me deal with a question that frequently arises: What about subliminal advertising?, to which I typically respond, What about it? It doesn’t exist!

That’s the short answer. Some elaboration is required.

The term subliminal means beneath the threshold of perception. Many things are subliminal, such as the circulation of our blood, which we normally do not feel, experience, or perceive moving throughout our bodies. And it is possible to have our skin touched in such a way that we do not notice the touch. Subliminal advertising, however, is supposedly the power to motivate action based on something that no one can perceive, such as a message flashed on a movie or television screen at 1/3000th of a second or the word sex unrecognizably embedded in ice cubes in a liquor print ad. James Vicary and Wilson Bryan Key, respectively, are the two proponents of these claims. See this brief recap of their roles in the history of subliminal advertising. Marketing professor Stuart Rogers argues that Vicary’s movie theater experiment was a hoax.

The notion of subliminal perception is a self-contradiction because it is not possible to perceive something that is beneath one’s threshold of perception. Add to this the fact that advertisers exert great effort to make their messages blatantly explicit — innuendo, sexual or otherwise, is intended to be noticed — and you have no grounds for the subliminal advertising complaint. Critics are never satisfied, though, so they now talk about semi-subliminal advertising and secondary imagery that is often missed on an initial look. The latter is just a variation on the subliminal-embed theme of Wilson Key. The former is what Ayn Rand would call an anti-concept. Either something is above the threshold of perception or it is not; it cannot be half-way between. There are, of course, levels of perception, once above the threshold, but the lower the level, the less likely we are to be influenced by the message.

Repetitiveness is then thrown into the mix with the argument that we are manipulated by a constant repetition of ads that makes us change our desires without being aware of the process. Hmm. There are quite a few influencers in our lives who use repetition to get us to change our minds (or to reinforce a value or view we already hold): parents in relation to their children, teachers in relation to their students, journalists in relation to their audiences, and, oh yes, politicians — who have been known to use many different communication techniques to win votes — in relation to their constituencies. As I say in my book, when it comes to ethics and taste in communication, advertisers can hold their own against any of these four groups of influencers. Advertising just happens to be a convenient fall guy.

Then there is the flap last winter [2006] over Kentucky Fried Chicken’s  subliminal advertising. A code word was inserted in one frame of a thirty-second commercial. When taken to KFC’s web site, the code word would produce a coupon for a Buffalo Snacker sandwich. ABC thought it was subliminal advertising and only ran the commercial minus the frame containing the code word — despite KFC’s wide publicizing of the stunt and their obvious desire for everyone to go looking for the code word. That the commercial had to be recorded and played slowly enough to view each individual frame speaks volumes about the people who still want to believe in subliminal advertising. Their motivation, as I demonstrate in my book, runs deep and is rooted in hostility toward capitalism, egoism, and, ultimately, reason.

Failure to understand the nature and causes of one’s emotions and, more generally, ignorance of the influence of the subconscious on one’s conscious perceptions are the sources of belief in subliminal communication. A commercial showing a sizzling T-bone steak, for example, at 5PM may trigger salivation in some, perhaps many. Why? Because of the viewers’ stored evaluations of steak as deliciously satisfying when hungry. A person who has just eaten, however, will not react that way. And a vegetarian may react with indifference or even indignation. The contents of our subconscious minds can indeed be triggered by conscious (not subliminal) perceptions, but the material in the subconscious is a conclusion that was drawn — an evaluation made — some time earlier.

Hmm. All this hostility toward advertising, capitalism, egoism, and reason must be triggered by subliminal communication from the parents, teachers, journalists, and politicians who repetitiously harp about those institutions’ alleged flaws and evils!

(January 1, 2007)

Healthy and Unhealthy Competition

Education and social critic

Alfie Kohn is an exhaustive researcher and engaging writer. I have not read all of his eleven original books, but I do highly recommend these two: Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A’s, Praise, and Other Bribes and Unconditional Parenting: Moving from Rewards and Punishments to Love and Reason. The titles and subtitles make clear his premises about human motivation and behavior. In his first book, however, No Contest: The Case against Competition, Kohn writes (p. 9), "The more closely I have examined the topic, the more firmly I have become convinced that competition is an inherently undesirable arrangement, that the phrase healthy competition is actually a contradiction in terms." To this, I must take exception.

Kohn, a strong defender of intrinsic motivation, frames his critique of competition — an extrinsic motivator — by setting up an irreconcilable conflict between doing well and beating others, by focusing on competence and accomplishment vs. trying to do something better than someone else. But healthy competition, especially the economic type, requires strong focus on doing well; beating someone else in the process, if it is focused on at all, is consequence. Kohn’s understanding of economic competition, unfortunately, is laced with Marxist mythology, Galbraith’s dependence effect, and the doctrine of pure and perfect competition, so he sees competition as an unfair and arbitrary creator of desires. Even at the highest levels of athletic competition — think John Wooden (1, 2) — winning is consequence of doing well. Winning for its own sake is indeed not an attractive character trait.

Other forms of competition, however, do tend to focus exclusively, or nearly so, on beating others. Competition in the animal kingdom is the extreme example where, because of the limited supply of food and territory, competition often becomes a fight-to-the-death encounter. Among humans living in a society of abundance, a different kind of fight-to-the-death desperation is sometimes seen — not physical desperation as animals might face, but psychological. Because of the anxiety that many people feel, competitiveness, or a desperate need to defeat others, becomes a defensive motivator. Doing well takes a back seat. Occasionally, a highly talented and accomplished person exhibits defense-driven competitiveness, but this does not detract from the point that the source of the competitiveness is psychology and the source of the accomplishment is ability.

One form of competition that devalues doing well and encourages beating others is that caused by government intervention into the economy. Ludwig von Mises points out that totalitarian states encourage people to court the favor of those in power, but this is true of any bureaucratic intrusion into the economy. Licensed professionals, because of the privileges extended to them by the government, will focus less on doing their jobs well and more on making sure the bureaucrats keep the unlicensed out of their market. Because of the restriction in supply brought about by the licensing monopoly, the consumers of that profession must now scramble — not too differently from what animals must do in their kingdom — to compete with each other, that is, to try to beat others, to obtain that limited supply. The beaten ones, as in the medical market, go without.

Kohn’s book is filled with examples of bureaucratic and defensive competition, two types that I would agree are unhealthy, but he does not always identify them as such. He, of course, confuses the two with healthy, economic competition. If read with an understanding of this confusion in mind, Kohn’s book can provide a detailed analysis of the less savory forms of competition that exist in our society.

(January 21, 2007)

Why Does Capitalism Need To Be Defended?

I admit that I have not heard

this question — why does capitalism need to be defended? — in precisely that form. After the hardcover edition of my book In Defense of Advertising: Arguments from Reason, Ethical Egoism, and Laissez-Faire Capitalism was published, I did hear the question this way: Why does advertising need to be defended? As advertising is the point man and product of capitalism, the two questions are intimately related.

The question about advertising initially surprised me. When the look on my face expressed a Did you read the book? reply, my questioners promptly continued, Advertising in the U.S. is an $xxx billion [fill in the current number] a year business. It doesn’t need to be defended! Somehow, apparently, the amount of money spent by the industry was supposed to be its own justification. Similarly, I could imagine someone thinking or saying, The United States is a $xx trillion [use current number] a year economy. Capitalism doesn’t need to be defended!

I soon came to realize where my advertising questioners were coming from: their question is motivated by the premises of what I call the critics’ world view. As I argue in my book, the social and economic criticisms of advertising — namely that advertising is coercive, offensive, and monopolistic — are based on false philosophic and economic ideas that at root are authoritarian.

The discussion with my questioners usually runs as follows. The questioners comment that advertising is a big bucks industry and, like any other big business, assume it eventually becomes immune to competition — and to criticism. It’s just words, they say, like water falling off a duck’s back. The criticisms have no effect on advertisers who, after all, are so big and powerful that they can easily ignore the complaints. Therefore, advertising does not need to be defended. QED. Subsequent discussion then brings out the premise that a little (or a lot) of legislation is needed to help cut these guys down to size. Why? Because advertising is so . . . well, coercive, offensive, and monopolistic. At that point, we are off to the litany of criticisms that ranges from alleged sexual orgies subliminally embedded in a Howard Johnson’s restaurant menu to the four-firm concentration ratio.

No doubt, anyone who has engaged the critics of capitalism has observed a similar pattern. It involves a move from surface appearances — advertising doesn’t need to defended — to underlying causal principles that initially seem unconnected to the appearances — these big advertisers need to be brought down a few notches. It is a move from what is seen, to use Bastiat’s phrase (book I), to what is not seen. Bastiat explained the seen and unseen in terms of economic events, but the more fundamental psychological issue here is that conscious perceptions (the seen) are shaped by the contents of one’s subconscious (the unseen). Defenders of advertising and capitalism must probe to those deeper levels and make the critics aware of, and answer, all of the buried fallacies that motivate their surface comments.

Contrary to what the critics of advertising — or capitalism — may think, their criticisms do have an effect. When left unanswered, the criticisms reinforce ignorance and misunderstandings about the nature of advertising and, by implication, capitalism. They reinforce and encourage hostility toward both. And they implicitly and explicitly provide a call for legislation to restrain what are perceived by the critics to be abuses of advertising and big business.

(February 15, 2007)

The Market Gives Privilege to No One

Bankers’ hours is an old phrase

that actually reflects monopolistic privilege. The 10AM to 3PM that banks formerly were open to serve customers was made possible by government regulation and the consequent lack of competition to force bankers to be more available when customers needed them. With modest deregulation (and the electronic bookkeeping that deregulation encouraged) banks today are open a little longer than the former hours and some are even open on Saturdays.

Doctors, dentists, lawyers, and professors, however — a distinguished group that enjoy government-granted privileges in the form of licensing and other regulatory protections — still do not usually work weekends. Free-market service firms must be open and available when their customers need them. Why should medical or educational services only be available Monday through Friday, 8AM to 5PM? The significantly unregulated computer industry’s 24/7 indicates the ultimate in service. The free market gives privilege to no one.

Privilege is a remnant of aristocratic life, special enjoyments granted due to birth or rank in society. Today, the rank stems directly from bureaucratic intrusions into the marketplace. Its key trait is that it is unearned, making the holder of the rank exempt from competition. Regulations restrict a portion of the market to the exclusive enjoyment of those protected at the expense of those who are not so protected. Sometimes, those enjoying this rank exhibit aristocratic arrogance, such as the professor who says to a student, during the professor’s posted office hours: I can’t talk now. I have a meeting. The meeting is with other professors and the message conveyed is that other professors are more important than paying customers.*

Robert Fuller, former president of Oberlin College, has coined a word that actually is broader than the monopolistic privileges I am talking about here. And Fuller, who is a social liberal, would certainly not agree with my application of his term. Fuller recognizes that there is legitimate rank that can be earned, so he coined the term rankism to mean the abuse of rank. Rankism, he says, describes a concept similar to, but broader than, racism, sexism, and bullying in general. Rankism insults the dignity of subordinates by treating them as invisible, as nobodies. Nobody is another n-word and, like the original, it is used to justify denigration and inequity (Somebodies and Nobodies: Overcoming the Abuse of Rank, p. 5). Fuller argues that equality means equal dignity and everyone has a right to it; equality does not mean equal wealth or equal rank. As a social liberal, he thinks the government, as in the case of race and gender inequities, must step in. My interpretation is that the government was a cause or magnifier of these particular inequities.

Despite his social liberalism, Fuller’s concept provides valuable insight into the psychological underpinnings of the abuse of rank by those in higher or privileged authority. Earned rank does exist naturally in society — parents hold rank over children, teachers over students, and employers over employees — and more earned rank would exist in a truly free-market economy because bureaucrats would have to get jobs in business and compete for their positions of authority. From the standpoint of psychology, though, as Fuller demonstrates, lording it over one’s subordinates derives from defensive anxiety and the necessity of setting oneself up as special or superior to others. Sometimes this necessity is made manifest through regulatory privilege. Rankism, says Fuller, is the last vestige of aristocratic class that must be eliminated from the home, school, workplace, and social order before we can achieve a just society based on equal dignity. The first step, in contrast to what Fuller would say, involves removing the last semblance of regulatory privilege by getting government out of our lives and economy.

Fuller’s web site is called Breaking Ranks.

*Oops! Did say students were paying customers? I realize that many professors — a privileged group I know well — object strenuously to this characterization. Yet students in a state-financed university, such as mine, often work thirty or more hours per week to pay for their education. This means they are paying substantial taxes to pay for their professors’ meal tickets. And this doesn’t count the taxes the students’ parents have paid over the years. So, yes, I do believe it is correct to call my students paying customers.

(March 13, 2007)

The Market Function of Piracy

In marketing the most effective way

to introduce new products is the free sample. In 1978 Lever Brothers spent $15 million ($63.57 million in today’s 2021 currency) delivering a free sample of Signal Mouthwash to two-thirds of all US households [about 51 million in 1978]. The strategy was a success and the product remained on the market well into the 1990s.

The significance of the free sample is product trial; it gets the product into consumers’ hands. If consumers use the sample and like it, they may go on to buy the product and buy it again and again, that is, become repeat purchasers; they may even spread the good word to others. When repeat purchasing and favorable word of mouth kick in, the product’s sales will experience a shift from slow to rapid growth and management will consider the product a success.

Free sampling is the best method of introducing new products, but it is also the most expensive. Not surprisingly, then, Forbes ASAP magazine* reports this alternative way to practice free sampling:

One security manager for a major manufacturer, who asked not to be identified, says she is sure some companies actually view being counterfeited as a boon to their efforts to build brand awareness. After all, she says, if some companies give away merchandise to expand market share, what's not to like about having someone else take on the expense of manufacturing and distributing the goods, as long as they’re high-quality copies?

Imitation is a universal trait of human behavior, ranging from the use of phrases and mannerisms of admired others to the reuse of hummable themes in music, recognizable images in paintings, and well-known plots in literature and Disney movies. Imitation is a normal part of the competitive process in growth markets. As the sales of an innovative new product takes off, competitors enter the market with their own, often cheaper, versions.

If the innovative product is patented, competitors make minor design or functional changes to secure their own patents. Knock-offs are unauthorized, usually cheaper copies. And, of course, the innovative marketer often produces its own cheap version, sometimes called a fighting brand, to fend off the competition. Over time real prices in the product category decline and quality improves.

Knock-offs are pirated products. Because they are usually cheaper than the original, knock-offs tend to appeal to a more price-conscious segment of the market; that is, the buyers of pirated products are probably not legitimate prospects for the innovative new product, either